Other Whistleblowers (Part 3) – What Happens to the Wrongdoers

Other Whistleblowers (Part 3) – What Happens to the Wrongdoers

Justice in the whistleblowing project hinges on two questions:  

1.       Is the wrong corrected and, if appropriate, is the wrongdoer found guilty and punished for what he did?

2.       Is the whistleblower protected or, at least, made whole for what she suffered?

Successful whistleblowing programs can achieve that justice.  In them, disclosures of wrongs and inefficiencies are welcomed.  The identities of whistleblowers are protected.  Whistleblowers do not suffer retaliation for their disclosures, and they may even be rewarded.  The wrongs are promptly corrected, and those who committed them are disciplined.  That may happen sometimes.

Suits filed pursuant to the False Claims Act or the Dodd-Frank Act can compensate the whistleblower nicely in the rare instances when they are successful.  The SEC received 3,923 Dodd-Frank whistleblower tips in 2015 and made just 150 awards (4% of the number of tips) worth $38 million.  False Claims Act suits resulted in $242 million of awards to whistleblowers, relating to fewer than 300 suits.

While these few cases appear to compensate whistleblowers and their attorneys, justice is not complete.  Even after agreeing to expensive settlements, the companies involved seldom admit their wrongdoing.

Take the case of 21^st Century Oncology.  Joseph Ting, a physicist at a Florida radiation oncology center, claimed that 21^st Century billed Medicare for procedures that served no medically appropriate purpose.  In settlement, 21^st Century Oncology agreed to pay $34.7 million to the federal government.  Of that amount about $7 million would be paid to Ting.  This good news for whistleblowers was partially offset by the fact that company admitted no wrongdoing in the settlement.  It also said that no patients were harmed by its actions.

Whistleblowers hope that a bad situation will be corrected.  Edward Snowden expressed the feeling of many whistleblowers when he said that his greatest fear was that nothing would change as a result of his disclosures.

More often the results of whistleblowing are mixed.  Snowden’s disclosures led to some restrictions on NSA date gathering, but they were far from as extensive as Snowden and some others had hoped.  A couple of my complaints led to apparent corrections and the rest had no effect at all that I could see.  Snowden is stuck in Russia, and I am at home, despite our limited successes.

But what if the disclosure is effective?  The wrongdoer is fired, the company is punished, or the wrong is corrected, and the whistleblower still fails to find justice? 

The disclosures of some whistleblowers lead to unequivocal successes.  The complaints Michael Hawley made were for the most part verified by the County of San Diego, and the CEO accused of wrongdoing was terminated along with her husband.  But Hawkey’s success did not translate into getting his job back after he was fired.

In the cases listed below, we know something of what happened to the wrongdoers.  Despite the eventual validation of their disclosures, the whistleblowers did not get their jobs back.  With the possible exceptions of Michele Gutierrez, who negotiated a $2 million settlement, and Kathleen Carroll, who was awarded $3.1 million after a suit that went on for six years, they have not come close to receiving just rewards for their honorable deeds.  Neither Gutierrez nor Carroll returned to her position.

There are, then, different possible outcomes for the whistleblower and the wrongdoer, with degrees of justice that range from success to disaster from the perspective of the whistleblower:

WB suffers retaliation?

Yes

No

Wrong corrected?

Yes

No

Yes

No

Wrongdoer punished?

Yes

No

Yes

No

Yes

No

Yes

No

Whistleblower compensated?

Yes

No

Yes

No

Yes

No

Yes

No

Rewarded

Whistleblower Disclosures Vindicated, But Still the Whistleblowers without Jobs

Whistleblower (Date of recent report)	Accusation	Following Accusation	Result for Whistleblower
Boshko (8/18/16)	Refused sexual advances of school president	President was fired	Demoted, placed on leave, then fired
Carroll (8/19/16)	Misreporting to State, failure to report educator misconduct on a timely basis, other improper actions	Investigation confirmed some of her claims	Fired but 6 years later won jury decision for $3.1M
Gutierrez (7/25/16)	Improper payment	Chair who ordered payment resigned as CEO, Board chair, bylaws changed	Demoted, fired.  Reportedly negotiated $2M settlement
Howell (8/10/16)	Town officials defrauded FEMA	Officials indicted	Fired.  Suit still pending after 8 years
McQuery (8/16/16)	College coach sexually abused minor	Coach convicted of sexual abuses	Placed on leave, then fired
Moore (8/16/16)	Proposed promotion of person who was target of harassment investigation	Person was promoted.  Boss was convicted of corruption charges.	Fired, settled suit for $150,000 (including $60,000 of legal fees)
Nisewarner (8/24/16)	Personal use of government vehicle, conflict of interest in purchasing procedures	Policy violations were addressed.	Fired, settled suit for $40,000
Nunn (8/25/16)	Criminal activity & ethical violations	President resigned, others fired	Demoted, relocated, ostracized
Thorell (8/16/16)	Mispricing securities in trading portfolio	Firm closed	Quit before he was identified.  Avoided prosecution for participation.
Vildasol & Flores (8/22/16)	Official used state employees in reelection campaign, misuse of public funds	Official lost reelection	Placed on leave, then fired.  Suit still pending after 5 years.